In many instances, a phone may be stolen or a spending card may be stolen before a customer realizes it. In other instances, a customer may think that a phone or card may be misplaced and so the customer thinks the phone or card will turn up soon so a customer waits before reporting the item lost or stolen. During the time between reporting the phone or credit card as lost or stolen, a thief or a fraudster may use a phone to make downloads, buy music, buy ringtones and make expensive calls, such as to overseas locations. The thief or fraudster with a credit card or debit card will generally make a number of purchases involving large transactions amounts or will withdraw large amounts of money from a bank account via an automated teller machine (ATM). Phone companies, credit card issuers, or debit card issuers attempt to limit fraud losses by immediately closing a customer's account upon receiving a report that the card has been lost or stolen. Since fraud losses can mount quickly, analytics and predictive models have been used to detect fraud or abuse of credit cards, debit cards, telephone charge cards, cell phones, and the like. Many times, the customer is getting a call about suspicious or potentially fraudulent activity before they realize a card is gone or a cell phone has been stolen.
Fraudsters are becoming increasingly ingenious. For example, with the increase in communications and electronic transactions, incidents of fraud surrounding these activities has increased. One type of telecommunications fraud includes “cloning” a cellular telephone. In this type of telecommunications fraud, an identifier, such as a serial number, for a cellular telephone is snooped, or read, as calls are transmitted, captured, and used to identify calls transmitted by other cellular telephones. Once the identifier is obtained, a fraudster can fraudulently charge calls to the account holder of the original cellular telephone.
Other fraudulent activity includes stealing credit or debit card numbers. Some workers carry small readers for reading the vital information off of a credit card. A person may get a job as a waiter or cashier in a restaurant and when the customer provides his card, the card may be swiped as part of payment and swiped again using the small reader. The card information is captured and then the person misappropriating the card information will use the information to make unauthorized purchases, or sell the information related to the card to others who will place unauthorized purchases. There are other schemes where a group of bad actors set up bogus ATM machines. In one instance, a convenience store owner was given $100 to allow a bogus machine to be placed in the store. The ATM included a reader only so prospective customers would use the machine and then complain that it did not dispense money. The bad actor would pick up the machine after several days and take it for “repair” and would never return. The misappropriated card numbers would then be either sold or used to make various purchases.
In short, various fraudulent schemes result in large losses to various institutions. Generally, the losses are billions of dollars per year. In addition, certain fraudsters and thieves are becoming increasingly knowledgeable and may adapt their methods so that they can go undetected longer, thereby further increasing fraud loss amounts. Therefore, there is large demand for systems and methods to detect fraudulent transactions, as well as a continuing need to find better ways to detect fraud or abuse of credit cards, debit cards, cell phones and the like.